The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

Continued from page 2

As the above table shows, Digital Realty has no one tenant that accounts for more than 10.4% of its annualized rents. While the 10.4% exposure to CenturyLink (CTL) might raise eyebrows, it is the product of CenturyLink’s acquisition of Savvis Communications and Qwest Communications International in 2011. Aside from this one exposure, the company has no other tenant over four percent of its annualized revenues.

As the above graph shows, Digital Realty has exposure to corporate enterprise, IT services, telecom network and Internet enterprise customers. These tenant types cover just about the entire spectrum of data users and are further spread throughout many industries.

Occupancy

Digital Realty ended the first quarter of 2012 with an occupancy rate of 94.8%, which is consistent with its historical occupancy rates and continues to be strong even with new developments coming on-line.

Leverage

One appealing attribute about Digital Realty is it has public debt outstanding, and the covenants contained within its public debt define the maximum amount of debt (and the type of debt) the company is allowed to utilize. That being said, Digital Realty is less levered than most REITs at only 4.7x EBITDA in the first quarter of 2012.